The COVER Protection & Health Summit returns for 2017, this year’s key themes surround moving the industry forward, identifying new opportunities and rising to the challenges presented by the protection and health markets.

Fixed fees 'nine times more attractive' than percentage-based adviser charging

Quarter want to see return of commissions

Consumers prefer fixed fees to percentage based charging, despite advisers' preference for the latter, research by Drewberry has found.

Half of respondents to a survey by the firm said they would prefer fixed prices for ‘standard' pieces of work, such as setting up a pension.

A mere 6% of the public liked the idea of a percentage of assets-based arrangement to calculate their adviser's fees, even though this has become the prevailing model for many financial advisers in recent years.

Drewberry, which asked 3,000 full-time, part-time and self-employed Britons between 19 and 27 June, found about a fifth (21%) of respondents preferred hourly adviser fees.

It also found almost a quarter (24%) of respondents wanted to see a return to commission-based charging, almost five years after the Retail Distribution Review (RDR) abolished the practice for retail investment products.

Director Tom Conner said the research showed the industry still had "some way to go" to get the idea of fee-based advice across to the man on the street.

"Just over half of Britons like the idea of set fees for standard pieces of work, for example, but many advisers have struggled to price their services in this way as there's no such thing as a standard client, which makes fee calculation more complex," he said.

"This also explains why, almost five years on from the introduction of fee-based advice, nearly a quarter of Britons say they would still be willing to pay traditional commission. To many, it's still an easy to understand, painless option. Despite its shameful track record, concerns as to commission bias haven't really penetrated the zeitgeist."

Conner said advisers favoured the percentage-based model as it was often an easier and faster method for them and relatively simple to calculate.

The research also found two-thirds (65%) of Brits have never received financial advice, but of those who had, two-thirds (63%) felt they were better off.

More news

As a result of significant increases in life expectancy, an additional 71,000 care home places will be needed for older adults spend with substantial care needs, according to a study published in The Lancet.